Europe is twenty years behind the United States in its commitment to information technology, according to research presented to the European Commission this week.

The findings of the report are a damning indictment of the Commission’s ten year strategy to boost competitiveness through the use of IT, first agreed in 2000 at the Lisbon Summit.

The new research, by Indepen Consulting and Ovum, found that Europe will almost certainly fail to achieve its ambition of becoming the world’s most dynamic knowledge-based economy by 2010, the so-called Lisbon strategy, unless technology spending in the continent is significantly increased.

Productivity levels in the European technology sector will fall even further behind those of the United States and Asia if current trends continue, the report found.

Indepen and Ovum blame legislation for stifling innovation in the European information and communications technology (ICT) industry, claiming that investors are wary of taking risks in the sector because successful enterprises often see profits from risky ventures “regulated away.”

The report also called for changes in European employment law to counter the ongoing loss of ICT jobs to other countries.

Phillipa Marks of Indepen consulting commented that “without change, we predict that growth in the EU over the next five years will be only 70% that of the US. By 2010, this represents €600 billion or €1700 for every person in the EU.”

In the EU, ICT contributed 42% of labour productivity between 1996 and 2000. In the US, the ICT contribution was 82%. This suggests that the problem is not just about spending, but also about effectiveness.